Overpaid tax issues

[LimpLettice]

I'm looking for some advice. DH changed jobs in early September, and his ex employers accidentally overpaid him £5k on the 30th. They ran the P45 then. He contacted them immediately and it has taken until now to get any idea of how much the overpayment was (some hours plus owed holiday was also paid) but no breakdown.

HMRC are now looking for £1500 tax, based on the overpayment and starting with £350 this month. This won't be rectified and returned until previous employer provide an updated P45. They refuse to provide this until the overpayment is returned, and then it will be done in the following months pay run, and there's still no clear breakdown of what is owed to them which could be another 8 weeks. Employer admits fault but 'hands are tied'.

Thing is I'm on SMP, and you know, it's December, and we have a new car plus DDs birthday to sort. This could well be taken out every month til Feb before it's sorted. Does anyone have a suggestion as to how we can avoid being out of pocket for their mistake?

Have you already returned the over payment then? Surely if you'd returned it immediately it would all be sorted by now?

If they've now confirmed the amount return it by bank transfer immediately and ask for the P45 to be provided straight away? Why can't they do that? Time to get a bit arsey with them.

I don't understand why tax is owing though? If he was paye then surely they'd have deducted the tax from the overpayment at source it wouldn't still be owing now?

Why was this not deducted at point of paye process?

If your dh contacts hmrc and requests they take the money from his paye in april 2019, they should be ok witb that. Hopefully it will all be rectified before then anyway so he won’t be out of pocket.

I am confused as to how hmrc knows about it though. Usually it needs to be reported through a tax return which he wouldn’t do until next year. Or through paye, which, if he has started a new job should result in a tax rebate next month if the employers make him pay it back.

Ok that's interesting.

Tax wasn't taken, has come up now with new employer running December wages with an updated tax code.

The payment couldn't be returned as previous employer have taken until this week to confirm what needed repaying as the figure included owed holiday and a few days wages. They have been chased endlessly. HMRC say they won't wait? And tax code won't be recalculated until a revised P45 is done. Ex employer say they cannot do a P45 until after the December payroll, and given how long it's taken to even get the over paid amount from them we are not expecting efficiency.

So then we might lose out this month but have a rebate end of Jan? If they agree to do it next payroll.

They still haven't provided any broken down figures apart from a lump which needs repaying, so we're relying on that being correct even though they seem totally incompetent. So it looks like he will have to suck it up and repay blindly to avoid the tax keep dragging out. Going to make December tighter than it needs to be because they are useless.

OP if the employer didn't deduct the PAYE then they are potentially liable, not your husband.

Ask HMRC about this:

www.gov.uk/hmrc-internal-manuals/paye-manual/paye90020